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Pensions
Lord Oakeshott of Seagrove Bay asked Her Majesty's Government:
- What is their estimate, in respect of the most recent year for which figures are available, of how many members of defined benefit pension schemes retired with a starting pension of:
(a) £50,000–£60,000;
(b) £60,001–£70,000;
(c) £70,001–£80,000;
(d) £80,001–£90,000;
(e) £90,001–£100,000; and
(f) £100,000. [HL2059]
Lord McIntosh of Haringey: The information is not available in the format requested. However, available estimates are given in the following table. They are derived from the Survey of Personal Incomes 2000–01 and show the total number of taxpaying individuals in receipt of any kind of private pension in the specified bands. For completeness, those with a private pension of less than £50,000 and the total number have also been included.
It is not possible to identify separately whether the private pension is derived from membership of a defined benefit or defined contribution scheme, nor to identify individuals retiring in the year.
(1) Total individuals in receipt of a private pension is estimated at around 7- million (Family Resources Survey 2000–01).
(2) The pension in payment recorded is net of any tax-free lump sum drawn from the fund in the year of retirement.
However, maximum tax-approved pensions available to people under the 1989 occupational tax regime are limited to two-thirds of the earnings cap, currently £97,200—ie £64,800. This covers around two-thirds of all occupational pension scheme members and potentially covers the remaining third if they change employment. Current estimates suggest that about 10 per cent of the pre-1989 group move out of this group each year. Therefore the number shown with pensions over £70,000 may not be a good indicator for future levels of tax-approved pension income.
Lord Oakeshott of Seagrove Bay asked Her Majesty's Government:
Lord McIntosh of Haringey: The following table shows for a number of age groups the income derived from a fund of £1.4 million built up in a personal pension. The table shows what income could be derived from both a joint life level annuity escalating annually with the retail prices index and with a 50 per cent survivor's pension; and additionally the income from a single life level annuity—the most common form of annuity purchased. These are based on annuity rates quoted by the Annuity Bureau in March 2003 and all assume that the maximum lump sum of £350,000 has already been drawn from the fund.
* Note that as the expected value of the income stream to be paid out by the annuity provider depends on the life expectancy of joint lives; the annuity rate depends upon their age differential. If the joint lives are of the same age and the man purchases, the annuity rate is higher than if the woman bought the annuity. This is because he is not expected to live as long as a woman purchaser and therefore a full annuity income is expected to be paid out for a shorter period than if the woman had purchased. Annuity rates are rounded to one decimal place.
However, the maximum tax-approved pension available to those who have joined their scheme since 1989, approximately two-thirds of all occupational scheme members, is two-thirds of the earnings cap, currently £97,200. The maximum benefits under the 1989 tax regime for occupational pensions are also dependent on annuity rates. So, for example, a man retiring at a scheme's normal retirement age of 65, on a salary of at least £97,200 and sufficient service to give a pension of two-thirds of capped final remuneration, could have a pension of no more than £64,800 if no lump sum were taken. If the maximum lump sum of £145,800 is taken, his actual pension income would then be reduced to £58,239, assuming an annuity rate of 4.5 per cent is used to calculate the necessary reduction to the pension in respect of the lump sum.
Baroness Gould of Potternewton asked Her Majesty's Government:
The Minister of State, Office of the Deputy Prime Minister (Lord Rooker): I wish to inform the House
The Indices of Deprivation 2000 (ID 2000) combine statistical indicators on economic, social and housing issues into a single score for each ward in England. This enables all wards to be ranked relative to one another according to their level of deprivation. The indices are used by government and other agencies to identify areas where there are concentrations of deprived people. They are, for example, used in the allocation of substantial resources aimed at renewing deprived neighbourhoods. For all these reasons it is therefore important for the indices to remain a robust way of identifying the most deprived areas. They were last revised in 2000; more recent and detailed data have now become available and last year we began consulting across and outside government for views on how best to strengthen and update the ID 2000.
The two-stage consultation period began in November 2002 and was due to be completed by the spring to allow publication in July 2003. We received over 200 responses to the recently concluded consultation on the stage one report, with many useful suggestions, including confirmation of the need for data on crime to form part of the revised indices.
The timing has been affected by the lack of crime data to form this crime domain. The required data are unlikely to be available until later this year. Additional research is also needed on how to move away from using wards as the basic geography of the indices, to one based on geographic units that are more consistent over time and in terms of size. This will allow us to identify areas where very small pockets of deprivation exist and to track change over time. There is more work to do on other aspects such as take-up of means-tested benefits and affordability of housing.
To investigate these issues in full will involve additional research and analysis so we have decided to delay the second stage of the consultation. We hope to complete this during the autumn with a view to publishing the revised Indices of Deprivation in the winter.
Lord Acton asked Her Majesty's Government:
Lord Rooker: In December, the Government published for consultation a draft of the guidance that we intend to give the Boundary Committee for England in the event that we direct it to carry out local government reviews in any of the English regions.
The draft guidance indicated that for the purpose of assessing the relative cost differential of different
I am placing copies of the paper in the Libraries of the House.
Private pension amount(2) (lower limit) Number of individuals(thousands)
Less than £50,000 5,340
£50,000 8
£60,000 5
£70,000 3
£80,000 2
£90,000 1
£100,000 or more 4
Total 5,370
Whether they will estimate, under the present taxation arrangements and annuity rates, for:
24 Mar 2003 : Column WA56
(a) a woman aged 60,
(b) a woman aged 65,
(c) a man aged 60, and
(d) a man aged 65,
what starting pension could be purchased today with a capital lump sum of £1.4 million, less the maximum permissible lump sum allowed to be drawn tax-free on retirement today, working on the assumption that the starting pension can provide for a surviving spouse pension to be payable at half the rate of the person retiring today and with both pensions uprated annually in line with the retail prices index; and what annuity rates have been used in making these estimates. [HL2060]
Joint life escalating* Single life level Purchaser Spouse Initial annual income (£) Annuity rate (%) Initial annual income (£) Annuity rate (%)
Female, 60 60 65 40,341 41,444 3.8 3.9 61,740 5.9
Female, 65 65 70 47,576 49,098 4.5 4.7 70,350 6.7
Male, 60 55 60 40,278 42,378 3.8 4.0 67,200 6.4
Male, 65 60 65 47,513 50,537 4.5 4.8 77,490 7.4
Whether they will inform the House of the progress being made to update the Indices of Deprivation 2000.[HL2262]
When they propose to consult on the cost model they are developing to assist the Boundary Committee for England to assess the relative cost differential of different patterns of unitary government in the regions.[HL2264]
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